Gardens at Market Square Mixed-Use Development to Break Ground in July

By Adriana Pop, Associate Editor

Millcraft Investments’ plan to develop a $95 million mixed-use complex on Forbes Avenue in downtown Pittsburgh has received its final approval from the city planning commission. According to the Pittsburgh Post-Gazette, the project known as Gardens at Market Square is expected to break ground in July.

Plans call for 125,000 square feet of office space, a 197-room Hilton Garden Inn, about 25,000 square feet of street-level retail and a 335-space parking garage. Miami-based Arquitectonica is the designer of the entire complex, which comprises an 18- and 11-story structure.

In order to address concerns raised by the owners and occupants of two neighboring buildings, the developer has agreed to eliminate a garage entrance and exit on Fourth Avenue and build a small park instead. All vehicles will enter and exit the new complex at Forbes, which could become a two-way street in the near future.

Turner Construction Co. has replaced Dck Worldwide LLC as construction manager and equity partner for the project. The company will also lease between 20,000 to 25,000 square feet of space in the building. Popular restaurant Burgatory and Jackson’s Social Bar and Restaurant are also among the property’s tenants. Construction is expected to be complete by 2015.

In other news, the Pittsburgh Business Times reports that Moonbeam Capital Investments LLC of Las Vegas has acquired the Century III Mall in West Mifflin from Texas-based C-III Asset Management.

The property spreads across 86 acres and offers approximately 1.21 million square feet of gross leasable retail space. According to the 2013 Pittsburgh Business Times Book of Lists, the center ranks among the region’s largest shopping malls. Sears, Macy’s, Dick’s Sporting Goods and American Eagle are among the property’s tenants.

“We’re long-term investors not looking to flip the project at all but instead seeing how we can make it better and turn it around to be the shopping hub that it was,” Sandra O’Clock, vice president of special projects at Moonbeam Capital, told the newspaper.

Photo credits: www.millcraftinv.com

Sampson Morris to Redevelop Wholey’s Building into Apartments

By Adriana Pop, Associate Editor

Sampson Morris Group is planning to redevelop the seven-story New Federal Cold Storage facility in the Strip District into 144 one- and two-bedroom loft apartments. Also known as the Wholey’s building, the windowless property is located at 1501 Penn Avenue.

According to the Pittsburgh Business Times, the Monroeville-based developer purchased the 330,000-square-foot structure in 2008. Initial plans called for the conversion of the building into condominiums. Later, Sampson considered developing a multi-tenant industrial facility and then in March 2012, the company marketed the property as an office project. However, the strength of the apartment market in the Strip District has convinced Sampson to change strategy once again.

The building’s first two floors will be used as parking, Sampson Morris Group CEO Michael Morris told the newspaper. The size of the apartments will average 1,100 square feet, while rent is expected to be around $1.80 per square foot. The developer intends to submit the project to the city planning department in the next few weeks and complete construction by the end of 2014.

In regional news, two multifamily properties in Ross Township have been listed for sale. The Pittsburgh Business Times reports that Philadelphia-based PRG Management Inc. is selling the 100-unit Governor’s Ridge Apartments at 112 Hilands Place, as well as The Cascades, a 146-unit community near Interstate 279.

According to Cindy Kamin, a senior vice president who works in multifamily and investment sales for CBRE, the assets are generating quite an interest from various investors. “There’s just not that much on the market right now and people want to buy,” she told the newspaper.

The Pittsburgh office of HFF Inc. is marketing the properties, which can be purchased together or individually. Built in the 1970s, the complexes are located less than two miles from one another and could be jointly managed.

PRG acquired Governor’s Ridge in 1988 and The Cascades in 1998. Both properties are almost completely occupied, with rents ranging from 85 cents to $1 per square foot.

Photo credits: www.loopnet.com

Speculative 130,000 SF Office Building Breaks Ground in North Fayette

By Adriana Pop, Associate Editor

Moon-based DiCicco Development is building a speculative 130,000-square-foot office building along the Parkway West corridor in North Fayette.

According to the Pittsburgh Post-Gazette, the developer is already preparing the site for the construction of the five-story project known as Westpointe Corporate Center Four. The building is being marketed by CBRE executive vice president Jeremy Kronman.

As demand for office space in the Parkway West area has been on the rise in recent years, DiCicco is confident that its latest project is worth the risk. The area’s vacancy rate has decreased from 18 percent at the end of 2011 to 14.3 percent at the end of 2012. According to CBRE, vacancy for class A office space in the corridor is currently around 5 percent.

“It’s just that the market is extremely tight. When you do a search for space in the Parkway West, there’s one building with 70,000 square feet, there’s one with 60,000 and there’s nothing else,” Kronman told the newspaper.

Construction on the Westpointe Corporate Center Four is expected to be complete by early 2014. The new building will be located next to a Hilton Homewood Suites hotel that DiCicco is developing in conjunction with Concord Hospitality.

DiCicco’s other projects in the Parkway West corridor include Westpointe Corporate Center One, which is occupied by Nova Chemicals, and Parkwest Corporate Center, which was leased to the Lanxess Corp. Chevron and RTI International Metals are also among DiCicco’s tenants.

In other news, Forest City Enterprises has announced that within the same transaction it has acquired its partner’s share in the Mall at Robinson, while selling its interest in the Plaza at Robinson Town Center. The company’s net proceeds were $7.75 million. Prior to the transaction, Forest City owned 72 percent interest in the mall and 50 percent interest in the strip center.

Photo credits: http://www.loopnet.com

Pittsburgh Public Schools Plan Sale of Closed Facilities

By Adriana Pop, Associate Editor

Pittsburgh Public Schools is considering the sale of 19 of its 20 closed buildings across the city. Only the Knoxville property at 324 Charles Street will be kept for use as a warehouse. According to the Pittsburgh Post-Gazette, the School District has selected Fourth River Development to market its portfolio.

Combined, the 20 properties have a debt of $9.15 million, as well as an annual operating cost of $681,850. The buildings with the greatest amount of debt are Northview in Northview Heights with $1.96 million; Fort Pitt in Garfield with $1.86 million; and Belmar in Homewood with $1.34 million.

For most of the assets, Fourth River is recommending a negotiated sale, which requires three appraisals. If sold to a for-profit organization, the property’s sales price cannot go under the highest of the three appraisals.

Four of the buildings, however, may not attract high bids and could be donated or demolished. These include Beltzhoover, Gladstone in Hazelwood, Rogers in Garfield and Belmar. The Pittsburgh History & Landmarks Foundation will review any demolition plans in detail, the newspaper reports.

On the other hand, the properties with the highest interest are McCleary in Lawrenceville, Morningside, Columbus on the North Side and Burgwin in Hazelwood. In fact, the Morningside building has only $9,180 in debt, the lowest of the 20 assets.

The School Board is also considering the sale of its headquarters, a 1920s building on South Bellefield Avenue in Oakland. Pat Morosetti, Fourth River’s sales and leasing manager, told officials that the property is the School District’s most valuable asset, as demand for both residential and commercial space in Oakland is well over 90 percent.

Photo credits: http://www.frd.us.com/pghschools/morningside.htm

Developers Plan More Apartments in Pittsburgh’s SouthSide Works

By Adriana Pop, Associate Editor

A group of investors is planning to develop a 170-unit apartment building on Hot Metal Street at the SouthSide Works. The Pittsburgh Business Times reports that Oxford Development and North Side-based PJ Dick have called off their plan to build a 120,000-square-foot office structure at the site and have instead partnered with Lincoln Property Co. to develop a residential complex.

Oxford Development Co. President and CEO Steven Guy told the newspaper that the proposed office project located between a SpringHill Suites Hotel and the Circuit Center union facility has generated insufficient interest from tenants.

“CBRE and Oxford Realty services have been co-marketing that site for nearly two years, and although we have come close on two or three occasions of getting an anchor tenant to kick it off, nobody has pulled the trigger on it,” he said.

On the other hand, apartment demand on the South Side seems to be on the rise. The Soffer Organization has also launched a rental residential project in the area.

“I think there’s great demand for apartments on the South Side,” Guy added. “The question is obviously, are people willing to pay what it costs to build?”

In other news, developer Todd Palcic is planning to convert the former Graphic Arts building in downtown Pittsburgh into apartments. According to the Pittsburgh Post-Gazette, the redevelopment of the eight-story, red-brick property at 422 First Avenue will result in 33 to 37 residences. Most of the units will be one-bedrooms, with rents ranging from $1,200 to $1,400 for an 800-square-foot home. Construction is expected to begin next year and be complete by 2015.

The developer recently paid $800,000 for the 35,000-square-foot building, as well as $350,000 for an adjacent lot which will be used as parking. The transaction was brokered by CBRE.

The repositioning of the First Avenue structure is Palcic’s fourth residential project in the city’s downtown area. The developer has already converted two Penn Avenue buildings into condominiums and is currently redeveloping a third into apartments. Called Lando Lofts, the project will feature 27 luxury rental units.

Photo credits: http://www.southsideworks.com